BriefingOctober 2015

EPRS | European Parliamentary Research ServiceAuthor: Marketa Pape, Graphics: Eulalia ClarosMembers' Research Service

ENPE 569.031

Reducing CO2 emissions from transport

SUMMARY

International efforts to keep global warming below 2˚C and avoid catastrophic climatechange require systematic cuts of greenhouse gas (GHG) emissions in all areas ofhuman activity.

Transport currently accounts for about a quarter of EU GHG emissions, making it thesecond highest emitting sector after the energy industries. While in other sectors, GHGemissions have been decreasing, in the transport domain they have risen by as much as30% over the past 25 years. Tackling growing emissions has become a matter ofurgency. EU measures to cut emissions from transport focus mostly on carbon dioxide(CO2) as the main GHG.

While at international level the EU strives for a global approach and adoption of bindingtargets by the relevant regulatory organisations, it has also set its own internal targetsand put policies in place to reduce GHG emissions from individual transport modes.These include an emissions trading system, binding standards for new engines, rules forfuel quality and promotion of alternative fuels.

Worldwide, the imperative to reduce emissions has led many countries and cities toadopt their own legislation or put concrete measures in place, some of which are beingshared, adapted and replicated.

The European Parliament continues to play an active role in promoting low-carbontransport and supporting ambitious climate policies. An EP delegation will take part inthe 21st Conference of the Parties (COP 21) to the United Nations FrameworkConvention on Climate Change (UNFCCC) in Paris, starting on 30 November 2015.

In this briefing: The EU context EU GHG emissions targets and

transport CO2 emissions by mode of transport Focus on fuels National policies and initiatives led

by cities The European Parliament and GHG

emissions from transport Main references

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GlossaryEmissions trading system (ETS): international system for trading greenhouse gas emissionallowances.

Greenhouse gas (GHG): a gas in the earth's atmosphere which traps heat and prevents it fromescaping into space. An increase in GHG concentrations leads to global warming. The mainGHG is carbon dioxide (CO2).

Heavy-duty vehicles (HDV): trucks (over 3.5 tonnes), buses and coaches (more than eightseats).

Market based measure (MBM): emissions trading, emission-related levies – charges and taxes,and emissions offsetting.

The EU contextAbout a quarter of EU greenhouse gas (GHG) emissions currently comes from transport,making it second only to the energy industries as the sector responsible for mostemissions (see Figure 1).However, while in othersectors GHG emissionshave been decreasing,in transport they haverisen. The transportmodes with thesharpest increase intraffic volumes havealso seen the largestincrease in GHGemissions: internationalaviation by 93%,international shipping by 32% and road transport by 17% in 2012 compared to 1990levels. Reduction efforts in transport focus on carbon dioxide (CO2) as the main GHG.

EU GHG emissions targets and transportTo help meet the target of reducing global GHG emissions by the 80% thoughtnecessary to keep global warming below 2˚C, the European Commission's 2011 WhitePaper on Transport put forward several non-binding longer-term targets for thetransport sector, with an overall goal to cut transport GHG emissions by at least 60% by2050 (with respect to 1990 levels) as a basis for regulatory developments. Existing andsubsequent EU legislation set a number of shorter-term targets and requirements, suchas rules for new vehicle emission standards, CO2 emissions from passenger cars andvans and the share of renewable energy in transport.

Since 2008, some reductions have been achieved and transport GHG emissions(including aviation) fell by 3.3% in 2012, with the biggest reduction in road transport(3.6%), followed by aviation (1.3%). Nevertheless, in 2012, EU transport emissions(including international aviation but excluding the international maritime sector) stillremained 20.5% above 1990 levels and will need to fall by 67% by 2050 in order to meetthe targets set in the 2011 White Paper on Transport (see Figures 2, 3 and 4).

Figure 1 – EU CO2 emissions: changes, 1990-2012, and situation in 2012

Data source: Statistical Pocketbook, 2015.

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Figure 2 – Evolution of EU CO2 transport emissions volumes 1990-2012

Data source: Statistical Pocketbook, 2015.

In October 2014, the EU Heads of State orGovernment in the European Council agreed thatEurope will reduce its GHG emissions by 40% by2030, compared to 1990 levels. This binding targethas two parts. Sectors covered by the emissionstrading system (ETS, see box) will have to loweremissions by 43% from 2005 levels. Sectorsoutside the ETS, which include transport, will needto reduce them by 30% from 2005 levels. Forthese sectors, the ‘Effort Sharing Decision’ (ESD)establishes how many tonnes of GHG emissionseach EU Member State may emit annually,1 and isbased on the country's relative wealth (GDP percapita). While the EU ETS sectors are regulated atthe EU level, it is up to the Member States todefine and implement national policies andmeasures to limit emissions from the sectorscovered by the ESD. Member States report theirannual GHG emissions, and exceeding thespecified annual emission allocation leads tocorrective action.

CO2 emissions by mode of transportRoad transportRoad transport accounts for about one fifth of theEU's total emissions of CO2 (cars and vans 15%,heavy duty vehicles 6%). Despite improvements infuel consumption efficiency in recent years, emissions remain high mainly due toincreasing road freight traffic (see Figure 2). The EU has adopted legislation settingbinding CO2 emission targets for new cars and vans. The 2015 target for new cars of130 grams of CO2/km was already achieved in 2013; the target for 2021 is 95g CO2/km.Likewise, the 2017 target for new vans of 175g CO2/km was already met in 2014, whilethe 2020 limit is 147g CO2/km. EU legislation also obliges car-makers to providecustomers with relevant information, including a label showing a car's fuel efficiencyand CO2 emissions.

The recentVolkswagen (VW)scandal brought tolight discrepanciesbetween laboratorytesting (type-approval) and on-road emissions(both NOx and CO2)from cars, revealinga persistent gap inemissions volumesbetween the twotypes of testing. The

EU Emissions Trading System (ETS)Covers: power and heat generation,energy-intensive industries, civil aviationwithin EEA (40% of EU GHG emissions).Does not cover: international aviation,other transport, buildings, agricultureand waste.How it works: the system sets a limit onthe amount of GHG emissions that canbe emitted (cap), which is reduced overtime, so that emissions fall. Companiesreceive or buy permits (allowances), eachallowing one tonne of CO2 to be emitted,which can be traded or kept for futureneeds. But they have to surrenderenough allowances to cover all theirannual emissions or get fined.To reduce emissions, companies canchoose to invest in more efficienttechnology, shift to less carbon-intensiveenergy sources, purchase extraallowances, or do a mix of all these.However, as a huge surplus of unusedallowances has built up and their pricefell, investments into cleaner energyslowed down. A reform of ETS is beingprepared.

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EU has long been using type-approval tests for CO2 emissions based on the newEuropean driving cycle (NEDC) standard, regarded as obsolete. The United NationsEconomic Commission for Europe (UNECE) developed new standards, known as theworldwide harmonised light duty test procedure (WLTP). The European Commissionproposes to phase in the WLTP in 2017, with full implementation from September 2018.

While freight transport has grown steadily between 1990 and 2010, and the related CO2

emissions have increased by about 36%, the EU has not so far set any CO2 limits. In2014, the Commission adopted a HDV strategy, consisting of short-term action tocertify, report and monitor HDV CO2 emissions, as a first move towards further steps.

Figure 3 – EU CO2 emissions from transport by transport mode, 2012

Data source: Statistical Pocketbook, 2015.

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Water transportWhile shipping is in most cases more fuel-efficient than other transport modes, its GHGemissions are growing fast. International shipping accounts for 4% of the EU's GHGemissions. Despite a 10% decrease between 2007 and 2012, attributed mostly to theeconomic downturn, shipping emissions have doubled since 1990, due to an overallincrease in maritime trade. Without action, maritime CO2 emissions in 2050 areexpected to be between 50% and 250% higher than current levels. Currently, there areno regulatory measures in place to effectively limit GHG shipping emissions.

For the EU, the preferred option to reducing emissions is a global approach led by theInternational Maritime Organization (IMO), which regulates the sector worldwide.However, progress at the IMO has been slow. In 2011, the IMO adopted the EnergyEfficiency Design Index (EEDI), which sets compulsory energy-efficiency standards fornew ships. However, some new ships meet these standards despite being 10% less fuelefficient than those built back in 1990. International negotiations have yet to bring anagreement on global market-based measures (MBMs) or other instruments that wouldcut GHG emissions from the sector as a whole, including existing ships.

As for the EU, the 2011 White Paper on Transport set a specific target of reducing CO2

emissions from shipping fuels by 40% (if feasible 50%) from 2005 levels by 2050. In theabsence of a global monitoring tool at IMO level and as a contribution to creating one inthe future, the EU decided to integrate maritime transport in the EU's GHG reductionpolicies and has adopted rules – which take effect from 2018 – for collecting andpublishing verified annual data on CO2 emissions from large ships using EU ports(Regulation 2015/757/EU). This is a first step towards setting reduction targets at a laterstage and applying MBMs, which might take the form of a contribution-based or target-based compensation fund, or an emissions trading system.

Inland waterways (IWW) are an environment-friendly alternative to road and railtransport in terms of energy consumption, which is about 17% of that of road transportand 50% of rail transport (in tonne/km of transported goods). However, some concernsremain to be solved. Inland vessels tend to remain in service for many years and only afew engines are replaced, which – in combination with few economic incentives andlimited resources for large greening investments – explains why inland navigation 'isbehind the curve when it comes to greening'.2 Compared to road haulage, IWW causeslower CO2 emissions per tonne kilometre, but higher air pollutant emissions for certainvessels. Currently, technical requirements for inland waterway vessels (Directive2006/87/EC) are being reviewed. While the review focuses on reconciling the coexistingtechnical regulations on navigable waterways and harmonising the requirements forissuing navigation certificates in the EU, one aspect being discussed is the introductionof technical requirements for vessels powered by liquefied natural gas (LNG). TheCouncil agreed a general approach on 11 June 2015.

AviationAviation accounts for about 3% of the EU’s total GHG emissions, with the largest partcoming from international flights. The International Civil Aviation Organization (ICAO),which regulates commercial aviation worldwide, forecasts that by 2050 they could growby a further 300-700%. Since the Kyoto Protocol to the UNFCCC, the ICAO has beentrying to adopt a policy for reducing international emissions, with limited progress.

In 2010, ICAO set a target to achieve a global annual average fuel efficiencyimprovement of 2% until 2020. A study by the International Council on Clean

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Transportation warns that with the current average annual improvement rate of 1.1%,this target is unlikely to be met. In 2016, however, and following long pressure from theEU for global action, ICAO is due to decide on the implementation of a market-basedmeasure to control emissions. While operational measures – such as modernising andimproving air traffic management technologies, procedures and systems – all contributeto reducing aviation emissions, MBMs are regarded as the most cost-efficient approach.

At European level, emissions from flights within the 28 EU Member States plus Iceland,Liechtenstein and Norway have been included in the EU Emissions Trading System(EU ETS) since 2012. The relevant Directive, 2008/101/EC, applies to both EU and non-EU airlines. However, to allow time for ICAO negotiations on a global approach, the EUETS requirements were suspended for flights to and from non-European countries forthe period 2013-2016. The inclusion of aviation in the EU ETS was challenged by someUS airlines, but the European Court of Justice confirmed that the inclusion is compatiblewith international law. Following the expected international development at the 2016ICAO Assembly, the European Commission intends to propose measures with effectfrom 2017.

RailThe least polluting mode of transport, rail accounts for less than 1% of transport CO2

emissions. The EU wants to improve the modal share of rail in the transport mix, forinstance by supporting the European rail network for freight and the construction ofcross-border rail links within the trans-European transport network. While there hasbeen some success achieved in rail passenger transport, with high-speed railconnections replacing air transport (for instance Madrid-Barcelona), the shift from roadto rail in freight transport remains, on the whole, limited.3

Focus on fuelsFor its mobility and transport, Europe relies heavily on oil, mostly imported. In 2010, oilaccounted for 94% of energy consumed in transport. The EU regulates the quality offuels used and, in parallel, aims at increasing the share of alternative fuels.

The EU common rules for fuel quality (Directive 2009/30/EC) require the GHG intensityof fuels in vehicles to be cut by 6% by 2020 (compared to 2010). The rules apply to allpetrol, diesel and biofuels used in road transport, as well as to gasoil used in non-roadmobile machinery. The reduction could be achieved through the use of biofuels,electricity, the use of less carbon-intense fossil fuels (such as natural gas, methanol, andhydrogen), and improvements at the extraction stage of fossil fuels. Emissionscalculations cover the whole fuel life-cycle, including emissions from the extraction,processing and distribution of fuels.

The EU set mandatory targets for renewable energy (Directive 2009/28/EC) with anoverall share of renewable energy (20%) and a specific target for transport (10%) by2020. In 2013, the share of energy from renewable sources in transport reached 5.4%.While land-based biofuels have become the most important type of alternative fuel forachieving the target, rising global demand sharpened the need to minimise undesiredimpacts of their production. One of these impacts is the conversion of forests andwetlands into agricultural land, known as indirect land use change (ILUC).4 Estimatesvary, but most studies suggest that ILUC can significantly decrease or even nullify theGHG emissions savings of biofuels compared to fossil fuels – on top of concerns abouttheir impact on food security in developing countries, on biodiversity and on the

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environment in general. Consequently, the EU rules for biofuel sustainability wereadapted and new rules added (Directive 2015/1513/EU), regulating the effects ofbiofuel production on the ILUC.

In 2013, the Commission put forward a strategy for clean power in transport. Thestrategy outlines how alternative fuels can be used in all transport modes and focuseson technological developments, investments and raising public awareness, insisting thatmarket development of alternative fuels should not only break the dependence on oil,but also reduce GHG emissions from transport.

National policies and initiatives led by citiesWorldwide, mitigation efforts of international bodies arecomplemented by national policies and action led, inparticular, by cities. A recent study on climate legislationcovering 98 countries and the EU confirms that newlegislation is being adopted rapidly, as addressing climatechange is seen as a matter of national interest.

Given that more than half of the world’s population livestoday in towns and cities, urban transport has turned into amajor contributor to GHG transport emissions.Consequently, cities have become key actors in mitigatingclimate change by promoting sustainable urban mobility.The worldwide network of the world’s megacities, C40Cities, addresses climate change by sharing best practice.Their transport initiatives include introducing rapid bustransit corridors, bike sharing programmes, congestionpricing and parking policies. On the European scale, theurban mobility observatory (ELTIS) facilitates the exchangeof information, knowledge and experiences in the field ofsustainable urban mobility, including the impact on climate.

The European Parliament and GHG emissions fromtransportThe EP has systematically encouraged a strong policy ofreducing both total and transport-related GHG emissions. Inthe process leading up to the adoption of the CO2 emissionsreduction targets for cars (Regulation 333/2014/EU),Parliament called for the NEDC test standards to be replacedby the WLTP standards as soon as possible.

In connection with the 2030 Framework for climate andenergy policies, the EP stressed the importance of biofuelsin reducing GHG emissions in transport, and regretted theCommission's lack of willingness to ensure the continuationof the Fuel Quality Directive after 2020.

In the framework of the mid-term review of the White Paperon Transport from 2011, on 9 September 2015, the EPadopted a resolution, 'Taking stock and the way forwardtowards sustainable mobility'. The EP insisted on keeping the original ambitious targets

Figure 4 – 2012 CO2 emissionscompared to 1990

Data source: Statistical Pocketbook, 2015.

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and asked the Commission to evaluate whether the actions proposed are sufficient toachieving the targets, and, if needed, propose additional legislative measures. The EPalso asked for measures to increase the fuel efficiency of, and reduce CO2 emissionsfrom, HDVs. Following the EP resolution and the EU Transport Council on 8 October2015, the European Commissioner for Transport, Violeta Bulc, announced that there willbe no revision of the roadmap for a single European transport area or a new WhitePaper and that instead of amending or adding new objectives, Member States' effortswill focus first on applying existing provisions.

In its resolution, 'Towards a new international climate agreement in Paris', of14 October 2015, the EP warns that the climate targets cannot be reached withoutbinding GHG reduction targets, full integration of renewables into the market, atechnologically neutral approach to decarbonisation and an integrated transport andinvestment policy. The EP calls on all UNFCCC Parties to work through the ICAO and theIMO to develop a global policy framework in their sectors, and set adequate targetsbefore the end of 2016 for an effective response to climate change.

Main referencesFocusing on environmental pressures from long-distance transport; TERM 2014: transportindicators tracking progress towards environmental targets in Europe, European EnvironmentAgency, EEA Report No 7/2014.

Statistical Pocketbook, European Commission, 2015.

Endnotes1 Decision 406/2009/EC covers the six greenhouse gases controlled by the Kyoto Protocol: carbon dioxide (CO2),

methane (CH4), nitrous oxide (NO2), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6).2 Synopsis of the thematic meeting, 'Greening in inland navigation from an economic perspective', Central

Commission for the navigation on the Rhine, 2013.3 Freight on road: why EU shippers prefer truck to train, study, DG IPOL, Policy Department B, European Parliament,

2015. While the share of road freight intra-EU transport has increased, the share of rail freight has been constantlydecreasing over recent decades, in contrast with the EU objectives (target shift of 30% from road to rail freight fordistances over 300 km by 2030, and a shift of over 50% by 2050, as set out in the 2011 White Paper on transport).

4 The impact of biofuels on transport and the environment, and their connection with agricultural development inEurope, study, DG IPOL, Policy Department B, European Parliament, 2015.

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© European Union, 2015.

Photo credits: © hfox / Fotolia.

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